In 2021, global gas demand surged 4.5% and recorded the largest volumetric growth on record, with an annual gain of 173 bcm that more than offset the 2020 2% decline. This strong rebound took place in the context of a faster than expected economic recovery following the lifting of lockdowns and a strong growth of global energy demand. Both economic, geopolitical and weather factors contributed to the growing and unprecedented tightness of the global gas market. They led to an explosion of Asian and European spot prices to historic highs.
In the context of the COVID-19-driven economic crisis and an abnormally warm climate, global gas consumption fell 1.8% in 2020, the third decline ever recorded in the history of the global natural gas industry. In the face of extreme volatility, driven by the evolving influence of the pandemic on energy demand throughout the year, as well as weather events and technical outages, natural gas demand, especially LNG demand, was resilient, contrary to other fossil fuels.
In 2019, slower economic growth, Chinese policy changes and a mild winter caused global gas demand growth to slow in a context of oversupply, resulting in a growing LNG surplus and much lower prices. The growth in natural gas demand has slowed down from 5% in 2018 to 2.3% in 2019, returning to the average annual growth rate observed since the start of the century. The main factor behind growth was the switching from coal and oil to natural gas in the power and industry sectors, which was prompted by the competitiveness of natural gas thanks to a growing abundant low-cost supply. This was notably the case in the United States, Europe and some Asian emerging countries. Thus, natural gas has remained the main beneficiary of the energy demand growth, to the detriment of coal in particular, causing its share in the energy mix to expand further.